Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, NZD

Published: Friday, 9 September 2011 14:36 BST - Written by John Cameron

STORY LINK Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, NZD

POUND STERLING

Sterling has enjoyed broad support in the currency markets today, thanks to this morning’s PPI Output data, which suggested that the increase in UK factory gate prices is accelerating. This has led investors to price-in a greater chance of a BoE interest rate rise within the next 12 months. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.5907

There are no significant US data releases penned-in for today’s session, so investors have adjusted their US Dollar positions in response to last night’s announcement by President Obama of a $450bn package to promote jobs. Cynics have suggested that the package represents a desperate last-ditch bid by Obama to win another four years in the White House, however investors have responded positively to the announcement, causing the EUR USD rate to head lower. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1592

The Euro remains under heavy selling pressure following the shock of yesterday’s highly dovish comments by ECB President Jean-Claude Trichet. The ECB’s significant downgrading of its Eurozone growth estimates for next year and the OECD’s prediction that Germany’s GDP will drop sharply in Q4 have piled the pressure on the Euro. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5207


Global stock markets have dropped over the past 24 hours, largely because of gloomy growth forecasts from the ECB and the Bank of Canada. The dip in global appetite for risk has hurt the Australian Dollar and even last night’s finalised Japanese GDP figure, which was marginally revised upwards, has not been enough to stem the losses for the Aussie. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 1.9298

The New Zealand Dollar has outperformed most of the other high-yeilders during today’s session. Some commentators have suggested that this is because of an increased demand for Kiwi Dollars thanks to the influx of rugby fans watching the Rugby World Cup, which started today. With best estimates putting the value of daily transactions in global currency markets at $3-4tn, it would seem more likely that the Kiwi is outperforming other higher-yielders because of its relatively lower interest rates. NEAR-TERM OUTLOOK – NEUTRAL.


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